HARTFORD, Conn. (WFSB) – All week, the I-Team looks at Connecticut’s affordable housing crisis and why thousands of people say they can’t find affordable housing.

We wonder why house prices continue to rise and why some blame regulation for the rise.

HIGHLY BID:

As a professional organizer, Alexis Gwynn likes to make sure everything has its place.

Unfortunately, she has no control over the mess she says she found while looking for her first home.

“I have been looking for 3 years. It’s been brutal,” says Gwynn.

Gwynn says she made offers, about ten of them, but was outbid every time.

“For every house I bid on, I bid a minimum of $10,000. A minimum and it doesn’t seem to be enough,” says Gwynn. “It’s not so much about finding the house you love, it’s more about finding the house where someone will accept your offer at that point.”

Prices keep rising, his real estate agent, John Zubretsky the Third said, quite simply because there are not enough houses for everyone.

“For example, Wethersfield. Two weeks ago I sold a house on Clark Ridge. There were 17 offers. The price was $140,000 over asking,” says Zubretsky. “We need to build new houses. There is no other way around this problem.

SUPPLY AND DEMAND:

When there is not enough housing, prices continue to rise. Landlords can charge whatever they want because you have nowhere to move. Everyone must compete for what is available.

“There are too many people chasing too few houses, so it just drives up the price of the house,” Zubretsky says. “That leaves other people, the losers in this scenario, with fewer options.”

Sean Ghio, political director at Partnership for Strong Communitiessays that while the national economy plays a role in this housing crisis, Connecticut has a supply problem.

“The main problem remains supply. You could lower interest rates to where they were a few years ago, and you would still end up with unaffordable housing because there isn’t enough of it and too many people want it,” says Ghio.

A recent study by the CT Housing Finance Authority found that Connecticut would need to build more than 169,000 units for low-income residents and more than 101,000 for middle-income residents to meet the demand for affordable housing in the State.

This study can find HERE.

“There is no entry into the market, even the smallest, oldest, least desirable homes in the market as a whole are too expensive for a first-time home buyer, so they stay, and what does this do to the rental market? This drives up rents,” explains Ghio.

REGULATIONS:

In fact, Connecticut has one of the lowest new home construction rates in the country.

Greg Ugalde is a local developer and past president of the National Association of Home Builders, or NAHB.

“Building in Connecticut is expensive, because of the cost of land and materials,” Ugalde says.

There is also a shortage of construction workers in Connecticut, so labor costs are also considered. But Ugalde says that when you look at the price of building new homes, “the price goes up a lot when you complicate things.”

He says federal, state and local regulations play an important role.

“We actually did a study that everyone is now citing across the country. When you look at the price of a home after construction, the sale price of a new home, almost a quarter percent of that is due to regulatory compliance,” says Ugalde.

The 2021 NAHB study mentioned by Ugalde showed that on average, regulations account for more than $93,000, or 24% of the average sale price of a single-family home valued at more than $394,000 at the time of the study .

Here is an overview of this study.

Regulatory costs could range from more than $6,000 for an application for zoning approval to more than $24,000 for changes to building codes over the past 10 years. An updated study was carried out in 2022, SEE HERE.

Ugalde says the study does not claim that all regulation is bad, but suggests that policymakers should reduce or eliminate unnecessary regulations.

“It would be eye-opening if people realized how much of that money isn’t really going toward countertops or kitchen cabinets or really adding value to the home. “It all adds up, Ugalde says, keeping shoppers like Alexis Gwynn right where they are.

“Can anyone build houses in CT?” It’s a good size, a garage and I don’t have to renovate everything, that would be great,” says Gwynn.

ZONING RESTRICTIONS:

Today we are only talking about single-family home construction.

People we spoke to for this series say it’s much more difficult when you want to build multifamily housing, almost impossible in some cases, because CT’s 169 cities and towns have different rules.

On Wednesday, we’ll take a closer look at local zoning laws and how some are proposing to change them.

On Monday, we explained the current state of CT’s housing market and provided financial resources to help, in part one of our Impossible Dream series: CLICK HERE.

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